Gemini sues DCG and Barry Silbert over alleged fraud


July 7, 2023


Olumide Adesina

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Gemini announced that it will file a lawsuit against conglomerate Digital Currency Group (DCG) and its CEO Barry Silbert, alleging for fraud. In a lawsuit filed in New York court on July 7, Gemini alleged DCG and Silbert were involved in a scheme in which Genesis borrowed "huge amounts of cryptocurrency and US dollars." According to the filing, Gemini will seek recovery of monies arising as a result of "false, misleading and incomplete representations and omissions by DCG and Silbert against Gemini, and the defendant's role in facilitating and facilitating Genesis' fraud against Gemini." He added that he was looking for It also plans to take legal action in the Genesis bankruptcy proceedings.

Genesis was the cryptocurrency lender responsible for running the earning program in partnership with Gemini. However, the company suspended withdrawals in November 2022, citing "unprecedented market turmoil" and has since filed for Chapter 11 bankruptcy.  According to a July 7 Twitter thread from Gemini co-founder Cameron Winklevoss, Silbert knew Genesis was "extremely bankrupt" in an attempt to continue the Earn program. The complaint allegedly contained false financial statements by DCG and Silbert, beginning with the June 2022 failure of Three Arrows Capital, which "left a $1.2 billion hole in Genesis' balance sheet."

Genesis Global Capital, the lending arm of digital asset conglomerate Silbert, filed for bankruptcy in January for making bad loans to FTX's sister company Alameda Research, among others.・Closed in November due to fraud allegations against Bankman-Fried.

According to Genesis' January 11th Chapter 11 bankruptcy filing, Genesis owes more than $3.5 billion to its top 50 creditors, including cryptocurrencies run by the Winklevoss brothers. Also included is $766 million to customers of the exchange Gemini. Gemini previously partnered with Genesis as part of the Gemini Earn Program, which lends cryptocurrencies to clients to generate income.